In progressive offices, a CHRO is the way to go
We say it all the time in the sports industry: “This is a people and relationship business.” People are a company’s key strategic advantage. Your competitors can build similar products, but they can’t clone your people. Your talent and culture are everything. It is humans who forge new markets, develop clients and score game-winning touchdowns. Products do not create themselves — people create those products.
As the sports business continues to modernize and institutionalize, pre-eminent brands and properties recognize the importance of valuing human capital properly. This is leading to an overdue shift of elevating human resources into an executive position. Chelsea FC, the Oakland A’s, Liverpool FC and Endeavor all recently hired senior HR leaders. These organizations acknowledge the fierce competition for talent both on and off the field. They find it essential to build employer brands where the best talent wants to work. The talent agenda is the primary role of these executive HR positions.
I know many visionary and capable chief executives in sports. There is no shortage of talent at the helm of our industry. CEOs set a strategic outlook for the business and then lead the various departments in executing their composite parts of the mission. However, a senior HR leader provides the connective tissue that enables the internal talent to develop, calibrate and grow the CEO’s vision. Loren I. Shuster, chief people officer of The Lego Group, framed it to me this way in a recent conversation: “The human resources team is the architect of culture, leadership and talent. The CEO, with the leadership team, sets the vision; it is our responsibility, as HR, to make it a reality by building the architecture that makes it come to life.” In this sense, HR is scaffolding to the organization, an appropriate analogy as teams look to truly build a high-performing team.
Turning to the media and entertainment industry, the current chief human resources officer (CHRO) of Lionsgate, Ross Pollack, has evenly divided his career between senior international TV licensing roles and increasingly complex HR positions. Lionsgate brought Pollack into the organization in 2014 with hopes of leveraging both skill sets in service of the company’s accelerated growth plans. As a member of Lionsgate’s executive committee, Pollack helped spearhead the merger with Starz in 2016 and orchestrated the company’s diversity initiatives, employee resource group development and Project Enterprise, focused on developing pathways for star female executives to rise rapidly in the organization. “Both [administrative and business] toolsets are critical to long-term success in a rapidly changing and increasingly complex entertainment sector,” Pollack said. “I’m privileged to serve in an organization that values my hands-on business experience and HR expertise. Those credentials give me the credibility to work alongside business leaders and my amazing HR team.” This is also a key point for sports properties looking to add this senior HR element: It’s not about simply promoting an internal HR leader to the executive table. An effective CHRO has a deep understanding of leading business verticals as well as how to apply a talent development model in promotion of the broader corporate goals.
Pollack also noted that “HR has become far more complex — particularly in Hollywood — as critical issues such as diversity, inclusion and M&A activity add to the CHRO’s daily challenges.” The line between sports and entertainment has been erased in the past decade, which means that we should look to glean the best of our shared industries.
Another way to frame HR empowerment is through resource allocation and talent mapping. Lisa Chang, former senior vice president and chief people officer at AMB Group (holding company for the Atlanta Falcons, Atlanta United and Mercedes-Benz Stadium), shared: “People costs are generally the highest line item in an organization’s expenses. In some cases, the costs can be upward of 70 percent of overall expenses once you include wages, benefits, payroll and other taxes. HR should take the lead in helping to quantify the ROI on people investments because these metrics are not only meaningful to the business but have a direct impact on the bottom line. Being able to speak intelligently about these metrics will make you a meaningful partner to your CEO.” Chang’s point drives home Lionsgate’s foresight in finding a versatile HR executive: You need someone who speaks the languages of economics, analytics, strategy and corporate development. A marketing budget, typically only 5 to 10 percent of overall expenses, would not be approved without a detailed, itemized, forecasted plan for ROI to validate the spend. So why would a 70 percent people spend not be managed with even more rigor?
In progressive organizations, executives visit HR when seeking to drive the organization forward and to create new platforms for success. Chang continued: “At [AMB] we knew that to deal with the rapid growth of our organization, we would need an innovative and sustainable people strategy. We were opening a new stadium where we planned to hire thousands of associates in a short amount of time, and in order to do so effectively, efficiently and in keeping with our business objectives, HR needed to take a lead in architecting the strategy in partnership with operations.”
Sports franchises can be valued in the billions of dollars. The sales, marketing and communications territories have moved from regional to international. As teams look to add floors to their company empire, they need to ensure they establish stable HR scaffolding to protect and empower the growth.
Chad Biagini is partner and global head of sport at Nolan Partners.